The fund is a cash account. It isn't
invested in anything. And that's the point ... Bush wants to invest it in
stocks, bonds, etc., and the scheme was to have the nation's "supreme" discount
broker, Charles Schwab, handle moving all of that social security money into
stocks and bonds with Schwab earning the commissions (Condi Rice was on the
board 1997-2001 and George Shultz is -- and they are under investigation in
Canada for illegal trading practices).

I wonder who is in charge of investing the dollars that
come into the Social Security fund. What is the fund's
portfolio? How can we get a look at what stocks and "private
companies" our government owns? What does all this juggling of budgets
and revenues tell us about The Plan? It sosunds as though they want to
eliminate the national government infrastructure so all aspects of
government can be "privatized" or "outsourced" or provided by contractors,
i.e. public-private partnership. If we visualize these partnerships as
being the same as the charter companies of old, I think we get a better
picture of what the heir/successors of the "merchant adventurers" are aiming
to achieve. They want to control the purse-strings of the government
in name, as well as in deed.

Linda

March 2, 2004

OP-ED COLUMNIST

Maestro of Chutzpah

By PAUL
KRUGMAN

The
traditional definition of chutzpah says it's when you murder your parents,
then plead for clemency because you're an orphan. Alan Greenspan has
chutzpah.

Last week Mr. Greenspan warned of the dangers posed
by budget deficits. But even though the main cause of deficits is
plunging revenue  the federal government's tax take is
now at its lowest level as a share of the economy since
1950  he opposes any effort to restore recent revenue
losses. Instead, he supports the Bush administration's plan to make its tax
cuts permanent, and calls for cuts in Social Security benefits.

Yet
three years ago Mr. Greenspan urged Congress to cut taxes, warning that
otherwise the federal government would run excessive surpluses. He assured
Congress that those tax cuts would not endanger future Social Security
benefits. And last year he declined to stand in the way of another round of
deficit-creating tax cuts.

But wait  it gets worse.

You see,
although the rest of the government is running huge deficits  and never did
run much of a surplus  the Social Security system is
currently taking in much more money than it spends. Thanks to those
surpluses, the program is fully financed at least through 2042. The cost of
securing the program's future for many decades after that would be modest 
a small fraction of the revenue that will be lost if the Bush tax cuts are
made permanent.

And the reason Social Security is in fairly good
shape is that during the 1980's the Greenspan commission persuaded Congress
to increase the payroll tax, which supports the program.

The payroll
tax is regressive: it falls much more heavily on middle- and lower-income
families than it does on the rich. In fact, according to Congressional
Budget Office estimates, families near the middle of the income distribution
pay almost twice as much in payroll taxes as in income taxes. Yet people
were willing to accept a regressive tax increase to sustain Social
Security.

Now the joke's on them. Mr. Greenspan pushed through an
increase in taxes on working Americans, generating a Social Security
surplus. Then he used that surplus to argue for tax cuts that deliver very
little relief to most people, but are worth a lot to those making more than
$300,000 a year. And now that those tax cuts have contributed to a soaring
deficit, he wants to cut Social Security benefits.

The point,
of course, is that if anyone had tried to sell this package honestly 
"Let's raise taxes and cut benefits for working families so we can give big
tax cuts to the rich!"  voters would have been outraged. So the class
warriors of the right engaged in bait-and-switch.

There are three
lessons in this tale.

First, "starving the beast" is no longer a
hypothetical scenario  it's happening as we speak. For decades,
conservatives have sought tax cuts, not because they're affordable, but
because they aren't. Tax cuts lead to budget deficits, and deficits offer
an excuse to squeeze government spending.

Second, squeezing
spending doesn't mean cutting back on wasteful programs nobody wants. Social Security and Medicare are the targets because that's
where the money is. We might add that ideologues on the right have
never given up on their hope of doing away with Social Security altogether.
If Mr. Bush wins in November, we can be sure that they will move forward on privatization  the creation of personal
retirement accounts. These will be sold as a way to "save" Social
Security (from a nonexistent crisis), but will, in fact, undermine its
finances. And that, of course, is the point.

Finally, the right-wing
corruption of our government system  the partisan takeover of institutions
that are supposed to be nonpolitical  continues, and even extends to the
Federal Reserve.

The Bush White House has made it clear that it will destroy the careers of scientists, budget experts,
intelligence operatives and even military officers who don't toe the
line. But Mr. Greenspan should have been immune to such pressures,
and he should have understood that the peculiarity of his position  as an
unelected official who wields immense power  carries with it an obligation
to stand above the fray. By using his office to promote a partisan agenda,
he has betrayed his institution, and the
nation.

Copyright
2004The New York Times
Company
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